The Budget has made some big announcements on the infrastructure front and also on beneficial changes to the affordable housing segment.

Anuj Puri, Chairman & Country Head, JLL India , said a significant point in the Budget is granting infrastructure status to the affordable housing segment.

“It will provide the vital budget housing segment with cheaper sources of finance, including, but not restricted to, ECBs (external commercial borrowings). Also, re-financing of housing loans by NHBs (National Housing Bank) can give a leg-up to the sector,” he pointed out.

According to Puri, promoters of affordable housing projects will benefit on two grounds. Firstly they now have a cushion of two additional years – a total of 5 years against the previous 3 – to complete the projects.

The apart, the liability to pay capital gains tax will be in a year after the project is constructed. This will be beneficial for land owners and land prices can ease; this benefit can be passed on to home buyers.

Under the latest provisions, developers will also get one-year time to pay tax on notional rental income on completed unsold residential inventory. The time limit for capital gains to be considered as a long-term gain has been reduced to 2 years from the earlier 3 years.

“More supply will enter the housing market now,” Puri added.

The other significant point is the abolition of the FIPB (Foreign Investment Promotion Board).

“This will give the real estate sector access to significantly more funding than it has today. A new FDI policy is under consideration, which promises to liberalise the FDI regime further,” he added.

However, the JLL India Chairman and Country Head makes no qualms in pointing out that the Budget missed out on giving any additional income-tax incentives to first-time home buyers or providing higher tax savings on housing loans and house insurance premiums.

“Nor did it raise house rent deduction limits,” he added.